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Ltd Company to Sole trader

  • 01-02-2010 5:23pm
    #1
    artfulangel
    Registered Users, Registered Users 2 Posts: 2 ✭


    Hi

    Would appreciate any advice on the following.

    I have a retail shop for 4 years set up as a Ltd Co from the start. For numerous reasons mainly as I intend to stay small and just try make enough to live on, i now believe i would be better off as a sole trader.Can I desolve the Ltd Company voluntarily? Is this a complicated thing to do? While co is being desolved can i begin trading as a sole trader?
    Will I have to close Ltd co bank account and open new "Trading as" account and are the bank likely to allow me to keep my 5k overdraft?

    I look forward to your answers.


Comments

  • #2
    Shane732
    Registered Users, Registered Users 2 Posts: 4,998 ✭✭✭Shane732


    artfulangel wrote: »
    Hi

    Would appreciate any advice on the following.

    I have a retail shop for 4 years set up as a Ltd Co from the start. For numerous reasons mainly as I intend to stay small and just try make enough to live on, i now believe i would be better off as a sole trader.Can I desolve the Ltd Company voluntarily? Is this a complicated thing to do? While co is being desolved can i begin trading as a sole trader?
    Will I have to close Ltd co bank account and open new "Trading as" account and are the bank likely to allow me to keep my 5k overdraft?

    I look forward to your answers.

    Straight forward enough thing to do. There are a number of ways it can be achieved. Unfortunately you might have a high enough tax cost depending on numerous factors. It's you';; have to have looked at professionally.

    Bear in mind that the liquidation of the company alone will cost you at least €3k. Unless you end up in a situation whereby you can opt for a voluntary strike off.

    Yes you will have to close the company bank account.

    Doing something like this would probably cost you up to €10K between everything....


  • #3
    wishful thinker
    Closed Accounts Posts: 78 ✭✭wishful thinker


    What I would like to ask is why you looking at changing from co to ST.

    Most SME family companies should be audit exempt (obviously it conditions are met), so they do not have the expense of an audit, but do have to complete annual accounts.

    This is almost the same as a sole trader would do. There should not be a huge discrepancy between costs of getting accounts done for a ST Vs getting is done for a Co.

    You also have the added advantage of
    • lower tax rate on profits - CT 12.5%
    • can have a company pension
    • if selling on business can extract cash in more tax effficient ways
    There are ways to simplify your Tax filing requirements (VAT & PAYE), if that is your concern.

    Check here for on simplifying procedures http://www.noelmurphy.ie/archives/600


  • #4
    ABEasy
    Registered Users, Registered Users 2 Posts: 566 ✭✭✭ABEasy


    Shane732 wrote: »
    Straight forward enough thing to do. There are a number of ways it can be achieved. Unfortunately you might have a high enough tax cost depending on numerous factors. It's you';; have to have looked at professionally.

    Bear in mind that the liquidation of the company alone will cost you at least €3k. Unless you end up in a situation whereby you can opt for a voluntary strike off.

    Yes you will have to close the company bank account.

    Doing something like this would probably cost you up to €10K between everything....

    Assuming you are solvent it won't cost anything near that. You need to file all returns with the revenue then file for voluntary strike off. There shouldn't be many tax issues given what you describe but you sould still seek advice from your accountant. Check http://www.kearneycurran.ie/products.htm for the cheapest strike off option I have found.


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